Demand for payment of DoT dues credit negative for Oil India: Moody’s

The demand for payment of statutory dues to the Department of Telecommunications (DoT) is a credit negative for Oil India Ltd, according to Moody’s Investors Service.

On 22 November 2019 and 3 December 2020, Oil India Limited (OIL) received demand notices from the Department of Telecommunication (DoT) for payment of ₹480 billion in statutory dues (with interest and penalties) by 23 January 2020 for leasing out surplus optical fiber network which were primarily for its internal communications under NLD (National Long Distance Service) licenses.

The demand notices by DoT follow the Supreme Court’s Judgement on 24 October 2019 that broadened the definition of Adjusted Gross Revenue (AGR) for telecommunications companies to include non-core operations.